The Five Core KPIs For Brick-And-Mortar Retail Businesses

Troy Spring is the founder and CEO of Dealer World, an auto dealer marketing agency.

In today's brick-and-mortar retail world, marketing managers, business owners and mid-level managers have to deal with the growing number of metrics, analytics and other variations of KPIs (key performance indicators) that are popping up in their marketing meetings. These numbers and reports are things they never had to deal with before. Many of these businesses are late to the party and just as many are ignoring it, others have hired digital agencies to help them navigate this new “measure everything” world. No matter the course they take to tackle it, most (if not all) still find it overwhelming. As a result, many of our clients have asked us to simplify this mess of KPIs to find an easier way to manage all the data.

As the principal at an advertising agency in the very competitive automotive space, I too have found that the increasing data to manage can make for a very long day. Especially when you have other things to consider, such as the media buy itself, creative and budgets, all the data can eat up a healthy chunk of your day.

What I have found is that defining four-to-five KPIs that matter the most to a client and prioritizing those few has proven very efficient. Bynarrowing down and focusing on some old-school metrics, such as how many people walked through the door and how many times the phone rang, we are able to generate more leads and sales because are spending time analyzing the closing, appointment ratios and the performance of the sales team rather than worrying about the bounce rate of the home page. This redirection of focus back to the basics can be very powerful.

As an example, dealership employees could be looking at the number of views on a particular inventory item as a KPI. After all, if a vehicle on a lot gets more views to the page that houses all the information on it, one could conclude you have a better chance at selling that particular car. Along with this, we have to consider the basics of bounce rate, conversions, cost per click, all Adwords data and metrics, social KPIs and more. The time it takes to look at, optimize and manage all this data could be a full-time job alone; no wonder small- to mid-sized businesses are overwhelmed.

By studying these KPIs and honing them to the ones that matter most, what we have found is that there are in fact some very powerful metrics, but they may not be the ones you have been watching with massive intent. As a matter of fact, they are so obvious, we find many businesses are not paying attention to them at all in favor of the shiny new metrics that analytics brings to the table.

Pay Attention To The Basics

Before I break down the five core KPIs, let’s consider a typical conversation between a client (business owner or manager) and agency (or internal employee). Often, an agency employee will reveal promising KPIs to a client: think a lower bounce rate, higher conversions, and an account that is performing well overall. However, the client is not seeing an increase in sales – a disconnect between the KPIs and results that both the agency and client believe should be improving.

To change this situation, we need to look at the smaller set of KPIs that matter the most and allow the conversations between executives, their marketing managers and digital team to be more productive.

To simplify the KPIs down to just a few can seem daunting; the obvious KPIs can get overlooked as people see them as old metrics. These are what we use with automotive retail clients:

How many people walked through the doors of the business (possibly the most important KPI for all brick-and-mortar businesses)?

How many people phoned in to ask questions about the business or product?

How many leads – either through the organic website or other – came during the specified time?

These are very basic, and although you won’t find any of these in Google Analytics, they are in fact the most valuable KPIs to a brick-and-mortar store. After all, these are the KPIs that lead to conversations with actual clients. No one should question that if you increase these, you increase sales.

Going a little further, we have found two other conversation starters that are often overlooked:

How many people were you able to converse with on a chat platform of your website?

How many people were you able to text with?

No Matter How Deep You Dive, Focus On Your Five Core Conversational Conversions

Don't get blinded by the big data that can cause confusion, an overwhelmed state, and hours of less-than-efficient work that leads to no more sales. Focus on starting more conversations with actual customers.

Here are a few actionable items you can use to focus on working on your business and be less overwhelmed:

Count how many people are walking into your store.

Count your phone calls.

Count your leads off your website.

If you do not have a chat product on your site or a texting platform to allow customers to communicate with you in a way they wish, get them and yes, count them.

Get to work with your team to increase these five conversational conversions, no matter how deep you have to dive into the other layers of KPIs.

Once you commit to this, the most important thing you can do is to remember that the deeper you dive, the more you should look back at the five core conversational conversions. Remember, they are only ones that start a conversation and therefore must remain the center of your marketing focus.